Introduction to Management and Organizations

Any organization consists of many employees (mostly). All employees have various tasks
and activities to perform their jobs. Therefore, we can establish that all employees in an
organization work. This is probably why an organization is called a workplace. All
employees have to manage their time to complete their activities using available
resources. No matter how much work they manage, they will always be known as workers.
Hence we can say that management is not about managing the work. In fact, it is about
managing the people who are working. It is not necessary for a manager to work himself,
but in order to become a manager, he must be managing those who are working.

WHO IS A MANAGER?
We can define A Manager as someone who works with and through other people to achieve
organizational goals. A manager coordinates the work activities of other people so that
organizational goals can be accomplished. However, keep in mind that managers may
have additional work duties not related to coordinating the work of others.

WHAT IS MANAGEMENT?
Whatever they actually do at their job is in fact Management. As mentioned earlier,
managers may or may not work himself, but at least they get the work done through
other people. Which involves coordinating the work activities of others so that their activities
are completed efficiently and effectively. Let us look at the difference between efficiency and
effectiveness.

Efficiency is getting the most output from the least amount of inputs in order to minimize
resource costs. Efficiency is often referred to as “doing things right”

Effectiveness is completing activities so that organizational goals are attained and is often
described as “doing the right things”. All those activities which lead to accomplishment of
your goals are included in effectiveness. Other activities which do not lead to goal
achievement, no matter how efficiently you perform them, do not make an employee’s
work effective.

To understand the difference between the two, let’s have a look at an example. For
example, a student is effective in university only when he is performing duties related to
his studies. Suppose he is very good player of badminton and often skips couple of classes
every week to spend more time in court playing. That student is efficient in his game
since he is a good player, but not effective because playing the game does not lead to his
goal of completing the degree for which he was admitted in university.

For best possible management, effectiveness and efficiency must be combined. One
without the other will always refer to a flawed management.
 LEVELS OF MANAGEMENT
Managers can be classified by their level in the organization, particularly in traditionally
structured organizations—those shaped like a pyramid.

In an organization, there can be multiples levels of management ranging from 2 to 20 (or

may be more). All the levels can be classified into three categories as in above figure.
Following are the three levels explained.

First-line Managers: (often called supervisors)

First Line Managers are located on the lowest level of management. They are responsible
for managing the work of non-managerial employees.

Top Managers:
Top managers are those who are at or near the top of the organization. They are responsible
for making organization-wide decisions and establishing plans and goals that affect the entire
organization.

Middle Managers:
Middle Managers include all levels of management between the first level and the top
level of the organization.

PRODUCTION AND OPERATIONS MANAGEMENT

The operational function consists of all activities directly related to producing goods or
delivery of services.

The production function exists not only in manufacturing and assembly operations,
which are goods-oriented, but also in areas such as health care and food etc which is service
oriented.

Definition: The management of systems or process that create goods and/or provide
services.

WHY STUDY OPERATIONS MANAGEMENT?

One is that operation management activities are at the core of all business organizations,,
regardless of what business they are in. Second, 35 percent or more of all jobs are in
operations management related areas—such areas as customer service, quality assurance,
production planning and control, scheduling, job design, inventory management, and
many more. Third activities in all of the other areas of business organizations, such as
finance, accounting, human resources, logistics, marketing, purchasing, as well as others
are all interrelated with operations management activities, so it is essential for these
people to have a basic understanding operations management.

FUNCTION WITHIN BUSINESS ORGANIZATIONS

Core functions of a business are Marketing, Finance and Operations that are necessary
for the production of goods or delivery of services as shown in the following diagram.

Business

Marketing Finance Operations

Production/
Operations

Marketing Finance

In addition, there are the support functions which enable the core functions to operate
effectively. These include, for example; 


The accounting and finance function – which provides the information to help economic
decision-making and manages the financial resources of the organization; 


The human resources function – which recruits and develops the organization’s staff as
well as looking after their welfare. 


Operation function is the core of most business organizations. It is responsible for the
creation of an organization’s good and/or services through which an organization
continues its value addition. However, the input about what kind of product or service
is needed and how it should be designed? Comes from marketing department because
marketing people are closer to customers and have a better understanding of needs and
wants of the customers and how to fulfill those needs and wants. This is why marketing
is one of the core functions. On the other hand, any production operation requires certain
amount of finances, budgeting, economic analysis and provision of funds to work

Operations
The operational function consists of all activities directly related to producing goods or
providing services. The production function exists not only in manufacturing and
assembly operation, which are goods-oriented, but also in areas such as health care,
transportation food handling, and retailing, which are primarily service-oriented.

In the process of producing goods or services, Raw materials are used as inputs, necessary
operations are employed transform (process) them into finished goods (outputs). All
these operations performed for the processing infact add value into goods or services.

Inputs are used to obtain finished goods or services using one or more transformation
process (e.g., storing, transporting, and cutting). To ensure that the desire outputs are
obtained, measurements are taken at various points in the transformation process
(feedback) and then compared with previously established standards to determine.

Figure 3
Inputs Transformation Outputs
Land / conversion Goods
Labor process Services
Capital
Information

Control

Finance
The finance function comprises activities related to securing resources at favorable prices
and allocating those resources throughout the organization. Finance and operations
management personal cooperate by exchanging information and expertise in such
activities as: Budgeting, economic analysis and provision of funds.

Marketing
Marketing consists of selling and/or promoting the goods or services of and
organization. Marketing is also responsible for assessing customer wants and needs, and
or communicating those to operations people (short term) and to design people (long
term). It guides operation function what kind of product is to be designed.

In modern business world, goods and services are used together to satisfy the customers’
needs in such a way that it has become very difficult to differentiate goods from services.
However, operations that are employed for production of goods are different from
operations that are employed for services. Following are the major differentiating
features between operation performed to produce good versus operations performed for
services.

DIFFERENTIATING FEATURES OF OPERATION OF PRODUCTION VS

SERVICES:
Any business that produces something, whether tangible or not, must use
resources to do so, and so must have an operations activity. However mostly the
tangible products are termed as Manufacturing businesses and intangible are
named as Servicing businesses. Traditionally, they had been separated on IHIP
characteristics (intangibility, heterogeneity, inseparability, perishability).

Increasingly the distinction between services and products is both difficult to

define and not particularly useful. Information and communications technologies
are overcoming some of the consequences of IHIP characteristics.

The operations performed to produce goods are different from the operations performed
to deliver services on following 7 feature.

1. Degree of Standardization:
Standardized Output: means that there is a high degree of uniformity in goods or service.
Customized Output: Means that each product or service is designed differently according
to the unique needs of each customer.

Standardized systems take advantage of mass production which leads to lesser per unit
cost. Customized systems take advantage of flexibility.
Operations in Manufacturing business tend to be more standardized while Operations in
Servicing businesses are more customized.
2. Customer Contact:
Service involves a much higher degree of customer contact. Performance of service often
occurs at the point of consumption. Service provider and the customers interact with each
other for service delivery. Whereas, manufacturing allows a separation between
production and consumption. Producer may stay in factory, while customer can be far
away at a different location.

3. Uniformity of Inputs:
Inputs in manufacturing businesses are more uniform while there is more variability in
the inputs of a servicing business. One of its reasons is the increased level of
standardization in manufacturing businesses.

Similarly, job requirements for manufacturing are generally more uniform than those for
services
4. Labor Content of Jobs
Because of the on-site consumption of services and the higher degree of variation in
inputs, services require a higher labor content as compared to manufacturing (which is
more capital intensive).

5. Uniformity of Outputs
Outputs in manufacturing businesses are more uniform since there is more
standardizations. On the other hand, there is more variability in the output of a servicing
business since there is more customization.

6. Measurement of Productivity
Measurement of productivity is more straightforward in manufacturing due to the high
degree of uniformity of most manufactured items. In service operations, measurement of
productivity is more difficult because of variability in inputs and outputs.

7. Quality Assurance
Quality assurance is more challenging in servicing firms where production and
consumption occurs at the same time as compared to manufacturing businesses.
All of these are summarized in the table below

Characteristics Goods Services

Output Tangible Intangible
Customer contact Low High
Labor content Low High
Uniformity of input High Low
Measurement of productivity Easy Difficult
Opportunity to correct problems before delivery High Low
Inventory Much Little
Wages Narrow range Wide range